Development

Topics
Cumulative causation theory

Cumulative causation theory posits that initial economic advantages lead to further growth and
development through a multiplier effect, creating a cycle of prosperity.

Cumulative causation is a concept developed by economist Gunnar Myrdal.

It emphasizes how economic disparities can be perpetuated and even widened over time.
The theory suggests that regions with initial economic advantages are more likely to attract
additional resources and investments.
This leads to further economic growth, creating a self-reinforcing cycle of prosperity.

Cycle of wealth

The cycle of wealth refers to the pattern where wealth accumulates among certain groups or
regions, leading to further economic growth and advantages.

It perpetuates income inequality and can create barriers for those outside the cycle.
Investment in education and infrastructure can help break the cycle by creating more
opportunities for all.
Government policies can influence the distribution of wealth within the cycle.
Technological advancements can either exacerbate or alleviate disparities within the cycle.

Development Gap

The development gap refers to inequalities in economic prosperity, infrastructure, and quality of
life between more developed and less developed regions.

Caused by historical colonialism, globalization, and uneven distribution of resources.

Can be measured by GDP per capita, life expectancy, education levels.
Leads to social unrest, poverty, and unequal access to healthcare and education.
Efforts to bridge the gap include foreign aid, education initiatives, and sustainable
development projects.

Economic development and industrialization

Economic development and industrialization involve the transformation of economies from

agrarian to industrial, impacting social structures, urbanization, and environmental conditions
while driving technological advancements and increasing global trade.
 Industrialization typically leads to urban migration as people seek jobs in factories and urban
centers.
Economic development can increase income inequality, with wealth often concentrated in
specific regions or among certain populations.
Sustainable development seeks to balance economic growth with environmental protection
and social equity.
Globalization plays a crucial role in spreading industrialization, allowing countries to
exchange goods, services, and technologies more freely.

Economic sectors

Economic sectors refer to distinct categories in which businesses operate and produce goods or
services, including primary, secondary, and tertiary sectors.

Economic sectors can be classified into primary (extractive), secondary (manufacturing),

tertiary (services), and quaternary (information) sectors.
Primary sector involves raw material extraction such as agriculture and mining.
Secondary sector involves industrial production and manufacturing processes.
Tertiary sector focuses on providing services like education, healthcare, and finance.

Employment in economic sectors

Employment in economic sectors refers to the distribution of jobs across different industries
within a country's economy.

Primary sector includes agriculture, mining.

Secondary sector involves manufacturing.
Tertiary sector comprises services.
Quaternary sector involves technology and knowledge-based jobs.

Gini Coefficient

The Gini Coefficient is a measure of income inequality within a population, ranging from 0
(perfect equality) to 1 (perfect inequality).

A higher Gini Coefficient indicates greater income inequality in a population.

A lower Gini Coefficient indicates more equal income distribution among individuals.
The Gini Coefficient is commonly used to compare income inequality between different
countries or regions.
It is calculated by plotting the Lorenz curve, which shows the cumulative percentage of total
income against the cumulative percentage of the population.

Globalisation
Globalisation refers to the interconnectedness and integration of economies, societies, cultures,
and politics on a global scale.

Occurs through advancements in technology and communication networks.

Involves the movement of goods, services, people, and ideas across borders.
Impacts vary, leading to both opportunities (economic growth, cultural exchange) and
challenges (inequality, cultural homogenization).
Can be influenced by government policies, international organizations, and multinational
corporations.

Globalization and its impacts

Globalization refers to the interconnectedness of economies, cultures, and societies worldwide,

leading to increased dissemination of ideas, goods, and information.

It facilitates the movement of people, capital, goods, and services across borders, promoting
international trade and economic growth.
Globalization can lead to homogenization of cultures but also encourages cultural diversity
and integration.
It can exacerbate social inequalities within and among nations, impacting labor markets,
wages, and working conditions.
Globalization has environmental implications, with increased trade contributing to the
depletion of resources and environmental degradation.

Gross National Product

Gross National Product (GNP) measures the total value of all final goods and services produced
by a country's residents in a specific period.

It includes the domestic production of a country as well as its income from foreign sources.
GNP considers net foreign income earned by residents and companies of a country.
It provides a broader picture of a country's economic performance compared to GDP.
GNP can be influenced by factors such as exchange rates and foreign investment.

Human Development Index

The Human Development Index (HDI) is a composite measure that assesses a country's social
and economic well-being based on life expectancy, education, and income.

HDI scores range from 0 to 1, with higher scores indicating higher levels of human
development.
It was developed by the United Nations Development Programme (UNDP) to provide a holistic
view of a country's development.
The three dimensions of HDI - health, education, and living standards - offer a more
comprehensive understanding of a nation's progress.
HDI is widely used to compare and rank countries based on their overall well-being and
 quality of life.

Indicators of development

Indicators of development are measurable factors used to assess socio-economic progress and
well-being in different regions or countries.

Common indicators include GDP per capita, literacy rates, life expectancy, and infant
mortality.
They provide insights into the quality of life, economic stability, and overall prosperity of a
population.
Indicators may vary based on the context and goals of the assessment, such as considering
social, economic, or environmental factors.
Comparing indicators over time or across regions helps identify trends, disparities, and areas
for improvement.

inequalities within countries

Inequalities within countries refer to disparities in wealth, access to resources, opportunities, and
services among different regions or segments of a nation.

Factors contributing to inequality can include historical legacies, government policies, social
structures, and economic conditions.
Inequalities can manifest in various forms such as income inequality, regional disparities,
educational access, and healthcare disparities.
These disparities can lead to social unrest, political instability, and hinder overall development
and progress within a country.
Efforts to address inequalities typically involve policy reforms, social programs, infrastructure
development, and advocacy for marginalized groups.

least developed countries

Least developed countries are nations with low income, high poverty levels, and limited access
to healthcare, education, and resources.

Characterized by high levels of unemployment and underemployment.

Often face challenges related to political instability and weak governance.
Dependent on foreign aid and vulnerable to external shocks such as natural disasters.
Struggle to achieve sustainable development goals due to lack of infrastructure and
economic diversification.

Levels of development

Levels of development refer to the economic, social, and demographic indicators used to
categorize countries based on their stage of development.
 Developing countries are characterized by lower income levels, higher poverty rates, and less
developed infrastructure.
Developed countries typically have high income levels, strong industrial sectors, advanced
technology, and high standard of living.
The Human Development Index (HDI) is a metric that measures levels of development based
on life expectancy, education, and income.
There are also 'emerging economies' which exhibit rapid industrialization and economic
growth, often transitioning from developing to developed status.

Newly industrialized countries

Newly industrialized countries are nations with rapidly growing economies, transitioning from
primarily agricultural to industrial societies.

Common characteristics include export-oriented economies and a shift towards technology

and manufacturing.
Not classified as developed countries like the United States or Canada, but also not
considered least developed countries.
Examples include South Korea, Singapore, Taiwan, and Mexico.
Often experience rapid urbanization and industrialization, leading to social and environmental
challenges.

Purchasing Power Parity

Purchasing Power Parity (PPP) is an economic theory that states exchange rates between two
countries should equalize the purchasing power of their currencies.

PPP is used to compare living standards and the cost of living between different countries.
It helps in adjusting economic indicators, like GDP, for cross-country comparisons.
In PPP, the currency's actual value is measured based on the cost of a similar basket of
goods in different countries.
PPP accounts for differences in price levels and inflation rates when comparing the relative
value of currencies.

Transnational Corporation

Transnational corporations are large companies that operate in multiple countries, with
headquarters in one country and manufacturing, sales, and services in others.

Often have complex supply chains spanning various countries.

Play a significant role in the global economy and influence international trade policies.
May benefit from lower production costs or access to new markets in different countries.
Impact local economies and cultures, leading to debates about their social and environmental
responsibilities.
Key Terms
Brownfield site

A brownfield site is a former industrial or commercial area where potential environmental

contamination may hinder redevelopment or reuse.

Commonly found in urban areas.

Often require remediation before redevelopment.
Can be repurposed for residential, recreational, or industrial use.
Regulations are in place to address environmental concerns.

Clark-Fisher Sector Model

The Clark-Fisher Sector Model classifies economies into three sectors: primary (agriculture),
secondary (industry), and tertiary (services).

Primary sector involves agriculture and resource extraction.

Secondary sector includes manufacturing and processing industries.
Tertiary sector consists of services like healthcare, education, and finance.
The model highlights economic shifts from primary to secondary to tertiary sectors in the
development process.

Corruption

Corruption refers to dishonest or fraudulent conduct by those in power, often resulting in the
misuse of public resources and undermining societal trust.

In developing countries, corruption can exacerbate poverty and hinder economic

development.
Transparency International ranks countries annually based on levels of perceived corruption.
Forms of corruption include bribery, embezzlement, nepotism, and favoritism.
The consequences of corruption can include a lack of public services, dysfunctional
institutions, and social inequality.

Cultural Diffusion

Cultural diffusion refers to the spread of cultural traits, ideas, beliefs, and practices from one
culture to another through social interactions and exchange.

Cultural diffusion can occur through migration, trade, conquest, or technological

advancements.
It can result in the blending and integration of different cultures.
 Cultural diffusion can lead to the adoption of new languages, religions, foods, and customs.
It can also result in cultural imperialism and the loss of indigenous cultures.

Demography

Demography is the study of human population, including its size, composition, distribution, and
changes over time.

It examines factors like birth rates, death rates, migration patterns, and population growth.
Demography helps understand social, economic, and environmental implications of
population trends.
Data on demography can inform policy-making and resource allocation decisions.
It analyzes population characteristics like age, gender, ethnicity, and socioeconomic status.

Economic factors affecting development

Economic factors influencing development include access to resources, trade relationships,

infrastructure investment, and labor market dynamics, significantly impacting a region's growth,
equity, and sustainability.

Access to natural resources can accelerate economic growth and development.

Trade relationships can create opportunities for investment and markets for exports.
Investments in infrastructure improve connectivity and facilitate business operations.
Labor market conditions, including education and employment rates, affect productivity and
economic capacity.

Economies of Scale

Economies of Scale refer to the cost advantages that businesses can gain when they increase
production and decrease average costs.

Economies of Scale can occur due to various factors such as bulk purchasing, specialization
of labor, and increased use of technology.
As production increases, fixed costs are spread over a larger number of units, leading to
lower average costs.
Economies of Scale can also lead to increased market power, allowing larger firms to
negotiate better deals with suppliers and customers.
However, there is a limit to the benefits of economies of scale, as diseconomies of scale can
occur if a firm becomes too large and inefficient.

Energy Security

Energy security refers to the reliable access to sufficient energy resources essential for
economic growth, national security, and daily living.
 Energy security involves ensuring a stable supply of energy sources at affordable prices.
Diversification of energy sources can enhance energy security and reduce reliance on a single
source.
Efficient infrastructure, policies, and technologies play a crucial role in achieving energy
security.
Investing in renewable energy and promoting energy efficiency can contribute to long-term
energy security.

Environmental degradation

Environmental degradation refers to the deterioration of the environment through depletion of

resources, pollution, deforestation, and loss of biodiversity.

It includes air, water, and soil pollution from human activities.

Deforestation disrupts ecosystems and leads to habitat loss for plants and animals.
Loss of biodiversity impacts ecosystems' ability to function and provide essential services.
Overexploitation of natural resources contributes to environmental degradation.

Food Security

Food security refers to the availability, accessibility, and affordability of food for all people, at all
times.

Food security is influenced by factors such as climate change, economic inequality, and
political instability.
Food insecurity can lead to malnutrition, hunger, and social unrest.
The concept of food security includes both physical access to food and the ability to utilize it
effectively.
Inadequate infrastructure, such as transportation and storage facilities, can also impact food
security.

Foreign direct investment

Foreign direct investment refers to an international business activity where a company in one
country establishes a long-term interest in a business enterprise in another country.

Companies invest in foreign markets to expand operations and access new markets or
resources.
FDI can lead to economic growth, job creation, and technology transfer in the host country.
Governments often offer incentives to attract FDI, such as tax breaks or streamlined
regulations.
FDI can also pose risks, such as exploitation of resources, loss of local control, or negative
environmental impacts.
Formal employment

Formal employment refers to work that is legally recognized, following set guidelines for working
conditions, wages, benefits, and protections.

Typically includes jobs in government, corporations, and established businesses.

Employees are often entitled to benefits such as health insurance and retirement plans.
Formal employment offers stability and legal protection for workers.
Contrasts with informal employment, which lacks legal recognition and often involves
precarious working conditions.

GDP per capita

GDP per capita is a measure of the average economic output per person in a country.

It is commonly used to compare the economic development of different countries.

It helps understand the standard of living and economic well-being of a population.
GDP per capita can be affected by factors like population size, income inequality, and natural
resources.
It is often used to analyze economic growth and development over time.

Greenfield site

A greenfield site refers to undeveloped land or a rural area that has not been previously built on
or used for urban development.

Typically located on the outskirts of urban areas.

Often chosen for new construction projects due to lower costs and fewer restrictions.
May involve environmental impact assessments before development.
Can lead to debates over loss of natural habitats and increased urban sprawl.

Gross Domestic Product

Gross Domestic Product (GDP) is the total value of all goods and services produced within a
country's borders in a specific period.

GDP is an essential economic indicator that helps measure a country's overall economic
performance.
It can be calculated using three different methods: production approach, income approach,
and expenditure approach.
GDP per capita divides the GDP by the population of a country, providing a measure of
average economic output per person.
GDP growth rate indicates the percentage increase in GDP from one period to another,
reflecting economic expansion or contraction.
Informal employment

Informal employment refers to jobs that are not recognized or protected by the government,
often lacking benefits and basic labor rights.

Informal workers may include street vendors, domestic workers, and piece-rate workers.
It is prevalent in developing countries due to lack of formal job opportunities.
Informal employment contributes to the economy but faces challenges such as instability
and lack of social protection.
This type of work often offers lower wages and little job security compared to formal
employment.

Multiplier effect

The multiplier effect refers to the phenomenon where an initial economic activity triggers a chain
reaction of increased spending, creating a larger overall impact.

Multiplier effect can lead to economic growth in a region.

It can be observed in industries such as tourism and manufacturing.
The multiplier effect can boost employment opportunities within a community.
It highlights the interconnected nature of economic activities and their ripple effects on the
local economy.

Post-Industrial Society

A post-industrial society is characterized by a shift from manufacturing and production-based

industries to service-based industries and an emphasis on information, technology, and
knowledge.

It is associated with the decline of traditional industrial sectors and the rise of knowledge-
intensive sectors.
The economy primarily relies on the production and exchange of services rather than physical
goods.
Cities in post-industrial societies often experience economic restructuring and gentrification.
There is an increased focus on creativity, innovation, and specialized skills in post-industrial
societies.

Primary Sector

The primary sector refers to economic activities that involve the extraction and production of
natural resources.

The primary sector is also known as the agricultural sector.

 It includes activities such as farming, fishing, mining, and forestry.
These activities contribute raw materials for other industries.
The primary sector is typically found in rural areas with abundant natural resources.

Quality of life

Quality of life refers to the overall well-being and comfort experienced by individuals within a
specific area, influenced by factors such as healthcare, education, income, and environment.

Common indicators include access to healthcare, education, income levels, job opportunities,
housing quality, and environmental conditions.
This concept is subjective and can vary greatly based on cultural values, personal
expectations, and individual perceptions.
Government policies and city planning can significantly impact the quality of life for residents
in a region.
Quality of life assessments often involve surveys and statistical analyses to measure and
compare well-being across different populations.

Quaternary Sector

The quaternary sector refers to the knowledge-based part of the economy that focuses on
intellectual activities and innovation.

The quaternary sector includes industries related to research and development, technology,
information services, education, and consulting.
Workers in the quaternary sector generally require advanced education and specialized skills.
The growth of the quaternary sector is driven by advancements in technology and the
increasing importance of knowledge-based industries.
In the quaternary sector, the production and dissemination of information are key economic
activities.

Secondary Sector

The secondary sector refers to the part of the economy that involves manufacturing and
construction.

It includes the production of goods and the transformation of raw materials into finished
products.
It is an important sector for job creation and economic growth.
The secondary sector typically involves both large-scale industrial production and smaller-
scale craft production.
Examples of secondary sector activities include car manufacturing, textile production, and
steel production.

Social investment
Social investment refers to strategies aimed at enhancing social welfare through funding and
support for education, health, and community development, emphasizing long-term societal
benefits over short-term financial returns.

It seeks to address social inequalities by investing in vulnerable communities.

Programs often include job training, healthcare access, and educational support.
The concept links economic growth with social progress and sustainability.
Governments and organizations may partner to facilitate social investment initiatives.

Tertiary Sector

The tertiary sector refers to the sector of the economy that provides services to individuals and
businesses.

The tertiary sector includes industries such as banking, healthcare, education, and tourism.
It typically involves the exchange of intangible goods or services.
The tertiary sector is the largest sector in many developed countries.
It is also known as the service sector.

Time-space Compression

Time-space compression refers to the concept that advances in communication and

transportation technologies have shrunk the world by reducing the time and space required to
connect people and places.

Time-space compression can be seen in the increased speed of travel and communication.
This concept has led to the globalization of industries and markets.
Time-space compression has also increased the interconnectedness of different regions and
cultures.
Advances in technology, such as the internet and social media, have further accelerated time-
space compression.

Walmart effect

The 'Walmart effect' refers to the social and economic impacts resulting from Walmart's
dominance in retail, influencing local economies, employment patterns, and consumer behavior.

Walmart's entry into a community often leads to the loss of local businesses unable to
compete on price.
While Walmart creates jobs, studies show these jobs may pay less than those lost from local
closures.
The 'Walmart effect' can lead to decreased property values in areas with significant retail
competition.
Walmart's supply chain practices can affect producers globally, shifting agricultural and
 manufacturing dynamics.

Water security

Water security refers to reliable access to clean water for various uses, ensuring sustainability
and reducing risks of shortages and crises.

It encompasses issues of water quantity, quality, distribution, and management.

Water security is essential for human health, food production, economic activities, and
ecosystem functioning.
Factors affecting water security include climate change, population growth, pollution, and
infrastructure development.
Strategies for enhancing water security include water conservation, efficient use of resources,
infrastructure improvements, and international cooperation.